by Jack Waymire
It stands to reason the financial service industry is a major special interest group. In fact, it spends more than $300 million per year on lobbyists who are charged with protecting the industry from regulations that damage its revenue and profits.
The Securities Industry and Financial Markets Association recently announced Judd Gregg; a former U.S.senator is taking over as its chief executive officer. see Former Senator to Run Wall St. Lobby Group by Ben Protess. He definitely has the political contacts for this role. He was the ranking Republican on the Senate Banking Committee and has served as an “international adviser” for Goldman Sachs.
He is also a timely selection. Under Dodd-Frank, Federal agencies are working on several new rules that require changes for the financial service industry. Gregg’s role is to delay the implementation of the legislation for as long as possible and soften regulations so they have minimal impact on the industry.
Unfortunately, anything that benefits the industry tends to damage investors.
Investors and politicians have short memories. If Gregg is successful, the politicians he influences will route legislation through countless study groups and committees so it becomes old news long before the legislation comes to a vote.
Gregg’s other role is to “soften” regulations that negatively impact the financial services industry. Soften is synonymous with introduce loopholes. He is charged with adding loopholes to bills that help the association’s members avoid or minimize the impact of new regulations on their companies.
Although Gregg says “He looks forward to working with legislators and regulators to improve the lives of our citizens,” his role is not investor friendly. When he says, “We are facing a great many challenges” the “We” does not include investors. His role is to protect Wall Street interests. That’s because regulations that benefit investors generally damage the revenue and profits of financial service companies.
Wall Street prefers regulations that make investors responsible for protecting their own interest knowing full well 98% of investors do not know how to protect their interests.
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